Stock ETF

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DEFINITION of 'Stock ETF'

A security that tracks a particular set of equities, similar to an index. A stock ETF is traded just as a normal share of stock is traded on an exchange, but unlike a mutual fund it will have its price adjusted throughout the day rather than at market close. This type of ETF is usually made up of stocks in a similar industry, such as energy, but can cover an index of equities as well.

INVESTOPEDIA EXPLAINS 'Stock ETF'

A stock ETF allows an investor to gain exposure to a basket of equities without having to purchase individual shares. A stock ETF can be treated like a normal stock in that it can be shorted or purchased on margin. Like most ETFs, a stock ETF often carries a management fee or other type of expense, but this is typically lower than those found in a mutual fund.

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    As of April 2015, some of the most popular and best performing exchange-traded funds (ETFs) that track the industrial sector ... Read Full Answer >>
  3. What is the difference between an ETF's net asset value (NAV) and its market price?

    An exchange-traded fund's market price is the price at which shares in the ETF can be bought or sold on the exchanges during ... Read Full Answer >>
  4. How can I calculate the tracking error of an ETF or indexed mutual fund?

    Calculate the tracking error of an indexed exchange-trade fund (ETF) or mutual fund by doing a standard deviation percentage ... Read Full Answer >>
  5. How do you calculate the excess return of an ETF or indexed mutual fund?

    For exchange-traded funds (ETFs), the excess return should be equal to the risk-adjusted (or beta) measure that exceeds the ... Read Full Answer >>
  6. Does an ETF pay out the full dividend that comes with the stocks held in that ETF?

    Exchange-traded funds (ETFs) pay out the full dividend that comes with the stocks held within the funds. To do this, most ... Read Full Answer >>
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